Are Personal Checks Still Necessary?

I get a check from my grandmother each year for my birthday. It's a sweet gesture — enough money to have a birthday dinner out — as well as a blast from the past. Who besides grandparents are using checks on a regular basis anymore? The checkbook I received when I opened my bank account five years ago is still half full.

In our digital world, most of us are using online payment methods like Venmo or PayPal or credit and debit cards to make our purchases. In a report released by the American Banking Association, there were 364 million open credit cards at the end of 2017. Considering there are a little more than 328 million American citizens, it's safe to say that we're a nation of credit card lovers. I know that I use Venmo and my credit card way more often than I find myself looking for my checkbook.

Writing a check or balancing your checkbook is something you're more likely to see in a movie from the early '90s than to actually do anymore. So are personal checks relevant in 2021? Are they necessary? Can they do anything that a credit card, cryptocurrency or online payment platform can't?

What Are Checks and Where Do You Get Them?

Personal checks act in the same way a debit card does, only on a much slower time frame. Instead of the money coming out of your account a few minutes after you swipe your card, the money you pay on a check comes out only when the check is cashed. If someone takes a few days or weeks to cash it, the money stays in your account.

You can order checks from your bank. Some banks will give you one free checkbook, and some will make you pay for every check you order.

When You Might Use a Personal Check

Checks are an old-school method of payment. But that's not to say they don't have their place in today's world. In some cases, a personal check could be not only the best way, but the only way to pay a bill. Some smaller businesses still accept checks (and may not accept your credit card), and there are plenty of landlords and real estate people who accept checks. You can pay your taxes by mailing a check to the IRS. In fact, some companies may charge you an extra processing fee for using a credit card to pay a bill, while there is no fee for using a check.

There's also the offline factor to consider. According to a 2018 report from the Pew Research Center, 11% of all adult Americans don't use the internet. 19% of households making less than $30,000 don't use the internet. If you live in a home without internet access, paying your bills by check may be your only option. Checks can be a lifeline for these homes.

>>Further Reading: Best Business Checking Accounts

Are Personal Checks Secure?

A large part of the natural shift away from checks has been because of safety. If a check falls into the wrong hands or gets lost, you might have accidentally exposed your information to a stranger. And if your address is listed on the check, someone might now have your banking and home address information. While a personal check does have your bank account and routing number on it, you have the option of not putting your home address on your checks.

You can easily close a credit card if your card number falls into the wrong hands. If a check with your bank account number on it gets to a scammer, you would have to close your checking account entirely and open a new one to protect your money.

It's common for a check to not be cashed the same day it was written. This leaves you with the possibility of a check bouncing. When someone says a check has bounced, it means that the funds written on the check were not available in the account. In other words, there wasn't enough money in the bank account to pay for the check. Bouncing a check can result in banking fees. Plus, in many states writing a “bad check” — that is, a check where you know the funds aren't there — is against the law.

Of course, it's important to remember that sensitive information online — like your Social Security number, home address, bank account number and password — can be hacked into and distributed around the globe in a matter of minutes. More than 143 million Americans had their personal information compromised in the Equifax hack in 2017.

Checks also leave a paper trail. You can keep a copy of your cashed checks for your financial records. Whether you use checks or do your banking totally online, you should practice safe financial standards for your money.

Checks come in checkbooks. Your checkbook comes with something called a “checkbook register.” This is a blank table where you can record information about each check, including the check number, amount and date.

Any article on personal finance will tell you how important it is to track your spending. It's great that checkbooks come with a register to do just that. If you want to get a really strong handle on your spending, you could use mostly checks and record everything in your register until you want to move to another form of recordkeeping.

Bottom Line

While I am mostly a credit-card girl myself, I have used a check in the last year. I wrote a check to pay for the deposit at my old apartment because we weren't set up in the online payment system yet. Without that personal check, I would have needed to get a money order from the post office.

Personal checks are being more and more phased out of our world, especially since you can open a credit card for free. (And especially when we live in a world where credit card offers are received every day!)

But they do still serve a purpose, and for some people, they're a way of life. My grandmother uses her checks to do everything from paying her electricity bill to send me my birthday money.

If you have a personal checkbook, keep it someplace safe. When you use a check, keep track of it so that you know where your information is going. Be sure that you have enough money in your checking account to cover any checks you write. Much like the rest of personal finance, being smart with personal checks comes down to being on top of your finances in general.

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